Vodafone Group on Monday said that is in its discussions with the Aditya Birla Group about an all share merger of Vodafone India and Idea Cellular, confirming the recent media speculation regarding a potential combination of its Indian business with the third largest telco by users, Idea Cellular.
“Vodafone confirms that it is in discussions with the Aditya Birla Group about an all share merger of Vodafone India (excluding Vodafone's 42% stake in Indus Towers) and Idea,” a statement issued on behalf of Rosemary Martin, Vodafone Group General Counsel and Company Secretary, said on Monday.
The statement added that any merger “would be effected through the issue of new shares in Idea to Vodafone and would result in Vodafone deconsolidating Vodafone India. It further added that there is no certainty that any transaction will be agreed, nor as to the terms or timing of any transaction.
Idea Cellular, which is a listed telecom operator, on Monday, informed stock exchanges that it is indeed involved in preliminary discussions with Vodafone Group for a potential merger. The telco was replying to a clarification sought by the stock exchanges on media speculation.
The Aditya Birla Group Company said that “it constantly evaluates various opportunities for enhancing the stakeholders' value. As a part of the exercise, the company has been in preliminary discussions with Vodafone.”
In view of the fact that the discussion is at the preliminary stage, the company is not in a position to share any further details,” the country’s third largest telecom operator said in a filing.
Idea Cellular further said that it is important to mention that the fundamental premise of preliminary discussion is based on equal rights between Aditya Birla Group and Vodafone in the combined entity.
It however added that “there is no certainty that the discussion with them will result in any agreement.”